Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
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COT: Speculators cut longs in oil and gold; Record copper short
Ole Hansen
Head of Commodity Strategy
Summary: The weekly Commitments of Traders (CoT) reports covering the week to July 9. The summary below highlights the major changes that occurred in commodities, forex, bonds and stocks. Please find the attached PDF’s for additional information.
Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.
To download your copy of the Commitment of Traders: Commodity report for the week ending July 9, click here.
To download your copy of the Commitment of Traders: Forex report for the week ending July 9, click here.
To download your copy of the Commitment of Traders: Financials report for the week ending July 9, click here.
Commodities
Speculators sold crude oil, albeit in small quantities, on global demand worries before the market rallied strongly on another large stock draw, geopolitical concerns and not least the potentially damaging impact of tropical storm Barry. Gold was sold for the first time in seven weeks following the stronger-than-expected US job report but before Fed chair Powell in testimonies on Capitol Hill left the door wide open for a July 31st rate cut. The 10% reduction was led by long-liquidation but also some fresh short selling was seen.
HG copper’s renewed and subsequent failed attempt to break key support at $2.60/lb. helped drive a 26% increase in the net-short to 56k lots, a fresh record. One for the radar next week, should the price action continue to move against those positioned for lower prices.
To download your copy of the Commitment of Traders: Commodity report for the week ending July 9, click here.
To download your copy of the Commitment of Traders: Forex report for the week ending July 9, click here.
To download your copy of the Commitment of Traders: Financials report for the week ending July 9, click here.
Commodities
Speculators sold crude oil, albeit in small quantities, on global demand worries before the market rallied strongly on another large stock draw, geopolitical concerns and not least the potentially damaging impact of tropical storm Barry. Gold was sold for the first time in seven weeks following the stronger-than-expected US job report but before Fed chair Powell in testimonies on Capitol Hill left the door wide open for a July 31st rate cut. The 10% reduction was led by long-liquidation but also some fresh short selling was seen.
HG copper’s renewed and subsequent failed attempt to break key support at $2.60/lb. helped drive a 26% increase in the net-short to 56k lots, a fresh record. One for the radar next week, should the price action continue to move against those positioned for lower prices.
In the agriculture space, grains were mixed ahead of Thursdays WASDE report for July which helped drive wheat and corn prices higher. Drought in Russia and parts of Europe have reduced the outlook for global wheat stocks. while Bloomberg reports that sudden weather shift in the U.S. Midwest toward hot temperatures and dry conditions could hurt corn yields further. Funds holding a record cotton short of 42k lots may breathe a sigh of relief on speculation that the crop damage from Tropical Storm Barry in the southern parts of the Mississippi Delta may be limited. Speculators cut their Arabica coffee net-short by 52% to lowest in almost two years before the price slumped by the most since March, after freeze concerns eased in Brazil.
Forex
Speculators kept an almost unchanged dollar exposure against ten IMM currency futures last week. The stronger-than-expected US job report on July 5 helped trigger renewed selling EUR and JPY while GBP continued to be sold on multiple political uncertainties.
Buying of CAD continued with the net-long reaching a March 2018 high while short bets on AUD and NZD were reduced. The Mexican Peso (+18k lots to 126k) remains the only significant long against the dollar as the hunger for carry supported higher-yielding EM currencies.
Forex
Speculators kept an almost unchanged dollar exposure against ten IMM currency futures last week. The stronger-than-expected US job report on July 5 helped trigger renewed selling EUR and JPY while GBP continued to be sold on multiple political uncertainties.
Buying of CAD continued with the net-long reaching a March 2018 high while short bets on AUD and NZD were reduced. The Mexican Peso (+18k lots to 126k) remains the only significant long against the dollar as the hunger for carry supported higher-yielding EM currencies.
Financials
What is the Commitments of Traders report?
The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.
In commodities, the open interest is broken into the following categories:
Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.
In financials, the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.
Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.
They are likely to have tight stops and no underlying exposure that is being hedged. This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.
The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.
In commodities, the open interest is broken into the following categories:
Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.
In financials, the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.
Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.
They are likely to have tight stops and no underlying exposure that is being hedged. This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.
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